Group demands for hospital emergency room service

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Reference no: EM131381349

Assume that patients have revealed their group demands for hospital emergency room service, as follows:

Q= 20,000 - 50P (Patients demand) where Q is the number of emergency room patients per year at the local hospital and P is the price of emergency roomservice.

The marginal cost of emergency room service is MC= $50.

A. Determine the socially optimal amount of publicly-supported emergency room service

B. Assume the emergency room service has been privatised so that a monopolist service provider starts to serve the community, determine the profit-maximising quantity and price.

C. To prevent the abuse of monopoly power, a regulatory authority intervene the market by regulating the industry.Determine the optimal regulated price and quantity.

Reference no: EM131381349

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